But at the moment demand is still there, and those price levels deliver the Kingdom additional budget revenues when spending commitments are growing.

It gets better: Saudi petrochemical companies raked in forecast-beating first quarter earnings to yield a 51 percent growth in net income year-on-year, according to research by NCB Capital.

The local stock market stands as the largest and one of the best performing indices in the region this year.

In February Saudi Arabia produced just over nine million barrels per day of oil. What’s surprising is that the country cut its production output by 800,000 barrels per day in March citing “oversupply”.

The devil is in the details and the ambiguous geopolitical risk premium. Americans are paying $4a gallon mark to fill up their tanks in many states, while the Saudis are revving away at just 60-cents-a-gallon.

President Barack Obama has weighed in, calling on major oil producers like Saudi Arabia to open the taps a bit more.

“The fundamentals of demand and supply, and spare capacity in the market, don’t justify these high oil prices”, Noe Van Hulst, Secretary General at the International Energy Forum (IEF), told CNBC.

He heads the world's largest gathering of Energy Ministers, and sees a healthier dialogue between producers and consumers than was the case in 2008. Although uncertain about how high the geopolitical risk premium is, he thinks the “the fear factor in the market is significantly overstated”.

Prices were being driven by “worst-case what-if scenarios”, which are “not likely to take place anyway”.

“It’s time for markets to take a fresh look at the fundamentals. It’s time to calm down,” Van Hulst said.

Spare Capacity Available

The CEO of Saudi ARAMCO, Khalid Al-Falih, told an industry gathering in South Korea that that there are “millions of barrels per day” of spare capacity available.

Van Hulst points out that regardless which numbers you look at, IEA or OPEC, the spare capacity is “still higher than it was in 2008”. He’s worried that if prices continue at current levels, “it may hamper the economic recovery”.

It’s a view shared by Samir Kasmi, Head of Energy Commodities at ABN AMRO Bank Dubai, who still describes the economic recovery as fragile: “we don’t have a bullish view for the demand side”.

And that is leaving the Saudis uneasy as well. “They have to find the balance between generating additional budget revenues and not jeopardizing the global economic recovery”, Kasmi added.

Before the unrest, Saudi Arabia favored a price between $70 and $80 per barrel.

Flashback 2003/2004: A domestic terror wave grips the country, with a series of violent attacks in several cities. Terrorists attempt to disrupt the country’s oil infrastructure, storm the US Consulate in Jeddah and bomb residential compounds of expatriates.

And how high was this “terror premium”, at a time when the actual production output installations were at a clear risk of attack? You will get an answer of about $5 per barrel on the more conservative end of estimates.

Back then, OPEC was stretched and barely had additional spare capacity. Today, the cartel enjoys an estimated cushion of 5-6 million barrels per day.

Although Saudi Arabia is now surrounded by several countries struggling with unrest and uncertainty, analysts identify little immediate risk for the crude heavyweight in the short-term.

But the recent verbal diplomatic bouts with Iran have not helped assuage the fears of some market players.

Kasmi believes the events in Bahrain may be a harbinger of escalating tensions between Iran and Saudi Arabia.

“You never know how things can develop in the region,” Kasmi said. For now, investors are reading the latest turmoil in the Middle East as a bullish signal.